ERJ staff report (DS)
Moscow -- In announcing strong third quarter results, Amtel-Vredestein has warned that it continues to face difficulties re-financing its short-term debts and warned that shortages of working capital might lead to supply disruptions.
The company is attempting to solve these problems with support from international bankers, but predicts that the result is likely to reduce the value of stocks held by shareholders.
The company said its debts at 30 Sept 2007 were up by six percent on the figure reported three months earlier. The company's debt stood at $870 million (Euro 590 million) on 30 Sept, up by almost $50 million in the three month period. A-V said the increase was "mostly due to forex losses on the debt portfolio."
Fast-mounting debts aside, A-V reported strong unaudited results for the three months to 30 Sept 2007. In the first nine months of the year, sales were up by 26 percent in absolute terms and by 36 percent on a like-for-like basis. In the period, the company sold its Kemerovo Chemical Fibre plantin a bid to raise more capital.
In terms of tyres, net revenues from the car tyre business, grew 24.7% for nine months 2007 to $414.1 million from $332 million in the first nine months of 2006, and represented 59.9% of total sales during the period. A-V said it sold 10.5 million passenger car tyres during the nine months period versus 9 million during nine months of 2006 - up 16.7 percent over the same period in the previous year. In volume terms premium segment (â€œAâ€) tyre sales grew 10.3Â percentÂ (324 000 tyres), value segment (â€œBâ€) tyre sales grew 6.8Â percentÂ (303 000 tyres) and discount segment (â€œCâ€) tyre sales grew 40.7Â percentÂ (680 000 tyres). The â€œCâ€ segment increase was a result of sales of certain products acquired with the Moscow Tyre Plant and sales contributed by the wholesale tyre operations.
The Company projects annual sales of approximately $980 million for 2007 and said it plans to be operationally profitable for the year. However, it expects to continue to show losses on a consolidated basis due to negative contributions by its AV-TO business and high interest expenses.
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Press release from Amtel